Switzerland and China sign WTO agreement

The economics minister, Pascal Couchepin (left) exchanges documents with China's top WTO entry negotiator Long Yongtu in Geneva Keystone

Switzerland has concluded a bilateral agreement with China, removing one of the final obstacles to Chinese membership of the World Trade Organisation.

The Swiss economics minister, Pascal Couchepin, and China’s deputy trade minister, Long Yongtu signed the accord on Tuesday at the WTO headquarters in Geneva.

“We have not made any major concessions, although we’ve shown a great deal of flexibility throught the negotiations,” Couchepin told swissinfo after the signing ceremony.

The final sticking point was an agreement on the granting of licences to Swiss insurance firms. Couchepin said that three licences would be awarded. One, for non-life insurance, would go to Zurich Financial Services before China joined the WTO.

The other two would be granted a ‘short while’ after Chinese accession. Swiss Life would get a life insurance licence and Swiss Re a re-insurance licence.

Analysts described this as a victory for Switzerland, even though it had originally asked for four licences. Under Beijing’s accord with the European Union, the 15-member EU was given only seven licences.

“When you start negotiations, you always ask for the maximum, but the benchmark is what others get, and I am not disappointed when I consider the benchmark,” Couchepin told a press conference.

Under the agreement, import tariffs for Swiss watches will fall to between 11 and 12.5 per cent from their current level of 25 per cent. The two countries also agreed to work towards opening tourism opportunities.

No agreement was reached on the inspection of grain shipments, and that will be the subject of further negotiations.

Couchepin said the accord would help to increase the level of bilateral trade, which last year stood at SFr 2.8 billion. “There will also be a big increase in Swiss investment in China. Many companies are already present in China, and there are others that are hoping to develop their business there. This agreement allows them to increase their business activity,” he told swissinfo.

The outstanding issues were discussed earlier this month during a visit to China by the Swiss president, Adolf Ogi. After talks with Chinese leaders, Ogi said he was confident that an agreement would be reached soon, despite appeals from the Chinese prime minister, Zhu Rongji, for the Swiss to show more flexibility.

The head of the Swiss negotiating team, Luzius Wasescha, denied that there had been any pressure to conclude the agreement this week. He said it was fortunate that Couchepin and Long had been able to meet on Tuesday.

“This was important politically, because it had been perceived that the talks were taking too long,” he told swissinfo.

“Our main requests were in the area of services, which are difficult to negotiate, because regulators have to be consulted in many countries. It’s a relatively new discipline in international trade. This is the basic reason why the process was longer with us than with others, who concentrated on traditional GATT (the precursor of the WTO) issues,” Warsescha says.

Switzerland is the penultimate WTO member to reach a trade accord with China. Now only Mexico remains. But all the bilateral accords have to be incorporated into a single global agreement before China can be admitted. These multilateral talks are chaired by the Swiss diplomat, Pierre-Louis Girard.

“Although a Swiss person is presiding over these talks, we have no influence over them,” Couchepin said.

The minister added, “I hear that there are difficulties in the multilateral talks, but difficulties are there to be solved. And they will be solved, because everyone in the world thinks it’s necessary for China to join the WTO soon.”

by Roy Probert